Closed loop elastic demand control by dynamic energy pricing in smart grids

Abstract Broadcasting of dynamic energy price signals for consumer's demand response programs (agents) is an effective and feasible way for demand side load management in future smart grids. Particularly, under fluctuating generation conditions of distributed renewable sources, automated and online market management strategies based on dynamic pricing are necessary for persistently conservation of energy balance and reducing the risk of instant energy shortages in the smart grids. This study presents a control theoretic energy market management approach based on closed loop elastic demand control scheme by means of dynamic price signal broadcasting. A PI controller structure is used to regulate energy price signals for demand response agents of smart grid community. Thus, total energy demand can be governed to respond fluctuation of renewable energy generation. To illustrate an application, a renewable energy integrated microgrid management scenario was studied numerically. A first order dynamic system model with a piecewise linear price-demand response is used to represent overall demand elasticity of the microgrid and a renewable energy microgrid simulation scenario is developed in Matlab/Simulink simulation environment. Simulation of 90 MWh peak demand market demonstrate that the closed loop dynamic energy pricing can be useful to control the elastic demand for tracing fluctuating generation of renewable energy sources. It is concluded that dynamic energy pricing can be useful medium for energy demand control.